Inventory on hand at the end of the year is Section 1231 property.

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Inventory on hand at the end of the year is not considered Section 1231 property. Section 1231 property generally includes depreciable property and real property (like buildings and equipment) used in a trade or business and held for more than one year. Inventory is considered ordinary income property, not Section 1231 property, because it is held primarily for sale to customers in the ordinary course of business.

Inventory on Hand at the End of the Year Is